Small businesses to also benefit from the proposed supplemental settlement.
COLUMBUS, OH – 1.9 million FirstEnergy residential customers will receive $125 million more in benefits from the federal corporate tax reduction, if the PUCO approves a “supplemental” settlement filed today. (See Supp. Settlement at footnote 2) The new settlement is the result of joint advocacy led by the Northeast Ohio Public Energy Council (NOPEC) and the Ohio Consumers’ Counsel (OCC) to negotiate a better deal for FirstEnergy residential and small commercial consumers. The new settlement improves on an earlier FirstEnergy agreement dated November 9, 2018, which NOPEC, OCC and others opposed.
The supplemental settlement will enable residential customers to receive a larger share of an $808 million rate reduction which reflects FirstEnergy’s lower tax bill under the federal corporate tax reduction effective 1/1/18.
The NOPEC/OCC-led negotiations resulted in $125 million more of the tax-related refunds being given back to the 1.9 million residential customers in FirstEnergy’s service territory. The supplemental settlement will translate into average monthly bill reductions for residential consumers of about $ 1.64 for Ohio Edison customers, $2.08 for Cleveland Electric Illuminating customers, and $1.90 for Toledo Edison customers over the next 25 years.
Also, the new settlement improves for consumers the terms of FirstEnergy’s proposals to charge consumers for expensive grid upgrades. Although NOPEC and OCC are not agreeing to FirstEnergy’s $516 million in grid modernization charges, the two organizations will not oppose charges for the initial grid upgrades in exchange for obtaining improved terms for a future audit of the grid charges and more consumer benefits from the federal tax reduction (and other consumer benefits). (See Supp. Settlement at p. 5-6) In recent years, OCC has had concerns that smart meters and other grid upgrades do not yet provide enough value to justify the increased charges to consumers.
Prior to the settlements, FirstEnergy had filed two cases with proposals for the PUCO to approve charges to customers for costs to upgrade its Ohio electric distribution system. One of the proposals was a three-year plan to provide costly system upgrades to its distribution system. (PUCO Case No. 172436-EL-UNC). FirstEnergy’s other proposal involved an expensive plan for a comprehensive upgrade that included advanced automation equipment, real-time voltage controls and the installation of smart meters. (PUCO Case 16-481-EL-UNC). NOPEC, OCC, and others opposed those two FirstEnergy proposals as being too costly for consumers. The PUCO staff, in negotiating the original settlement, merged and reduced these two proposals.
The new settlement also secures additional savings for residential consumers to reflect that the grid upgrades should reduce some of the utilities’ future operating expenses. (See Supp. Settlement atp. 6)
“We are very pleased with the outcomes of our collaborative intervention into this case to significantly improve the settlement for Ohioans,” said Chuck Keiper, NOPEC’s Executive Director. “Putting millions of dollars back into the pockets of our residential customers and working to achieve future rate protections is what NOPEC’s consumer watchdog and advocacy mission is all about,” Keiper added.
“One of the Ohio Consumers’ Counsel’s key goals is to convert the utilities’ federal tax savings into utility bill savings for consumers. Our settlement achieves this goal by providing residential consumers with a greater bill reduction from FirstEnergy’s tax savings, said Consumers’ Counsel Bruce Weston. “With the new settlement’s additional tax savings for residential consumers and a future PUCO audit of the electric grid charges, we decided not to oppose FirstEnergy’s initial charges for electric grid upgrades,” Weston added.
Click here to see the settlement
Here is a web link to the original FirstEnergy settlement (that NOPEC and OCC opposed): https://dis.puc.state.oh.us/DocumentRecord.aspx?DocID=4ab47fca-66e3-405d-96bc-6c633980781b
Here is a web link to the PUCO docket, showing all filings:
http://dis.puc.state.oh.us/CaseRecord.aspx?CaseNo=18-1656&x=0&y=0
About NOPEC:
NOPEC (Northeast Ohio Public Energy Council) is a non-profit group of over 225 communities that negotiates lower utility rates. As Ohio’s largest energy aggregator, NOPEC buys gas and electricity in bulk to help lower customers’ utility bills. Since 2001, NOPEC has saved residents and businesses over
$300 million and awarded over $22 million in energy-efficiency grants to NOPEC member communities. For more information about NOPEC, visit www.nopec.org.
About the Ohio Consumers’ Counsel
The Office of the Ohio Consumers’ Counsel is the state’s representative of 4.5 million Ohio households. The state agency serves Ohio consumers in state and federal proceedings affecting their electric, natural gas, telephone, and water services. The agency also educates consumers about their utility services. For more information, please visit the agency’s website at http://www.occ.ohio.gov/ and Twitter at @OhioUtilityUser.
